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Oil Prices Sink On Surprise Inventory Build

The American Petroleum Institute (API) reported a crude oil inventory build of 5.36 million barrels for the week ending November 30, compared to analyst expectations of a draw in crude oil inventories of 2.267 million barrels.

Last week, the API reported a build of over 3 million barrels. A day later, the EIA had confirmed the build.

Leading up to today’s data release from the API, crude oil prices were trading modestly up at 1:08pm EST, with WTI up $0.17 (+0.32%) at $53.12 and Brent crude up $0.37 (+0.60%) at $62.06. This was due to various OPEC players, including Russia, giving new hope that a production cut may be reached this weekend, and that the production cut could be as much as 1.4 million bpd.

Inventories in the Cushing, Oklahoma facility this week had climbed by 1.44 million barrels.

The API reported a build in gasoline inventories for the week ending November 30 in the amount of 3.61 million barrels. Analysts had predicted a build of 1.333 million barrels for the week.

US crude oil production as estimated by the Energy Information Administration was also bearish in nature, showing that production for the week ending November 23 stood 11.7 million bpd for a third week in a row.

Distillate inventories were up this week by 4.32 million barrels, compared to an expected build of 1.600 million barrels.

The U.S. Energy Information Administration report on crude oil inventories is due to be released on Thursday at 11:00a.m. EST, delayed one day in observation of the George H.W. Bush Memorial Service Day on Wednesday.

By 4:40pm EST, WTI was trading up for the day at $52.61 and Brent was trading up at $61.43.